Are student insurance subject to value-added tax in Vietnam from July 1, 2025?

Are student insurance subject to value-added tax in Vietnam from July 1, 2025?

Pursuant to Clause 7, Article 5 of the Law on Value-Added Tax 2024 (effective from July 1, 2025), specific regulations on objects not subject to tax are as follows:

Objects not subject to tax

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6. Watering, drainage; plowing, harrowing land; dredging canals, internal ditches for agricultural production; services for harvesting agricultural products.

7. Land use rights transfer.

8. Life insurance, health insurance, student insurance, other insurance services related to humans; livestock insurance, crop insurance, other agricultural insurance services; insurance for ships, vessels, equipment, and other necessary tools directly serving fisheries catching; reinsurance; insurance for oil and gas projects, foreign-flagged oil tankers rented by foreign oil contractors or subcontractors operating in the Vietnamese sea, overlapping sea areas where Vietnam and adjacent or opposite coastal countries have agreed to place under joint development policies.

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According to Article 18 of the Law on Value-Added Tax 2024, the specific provision on effective timing is as follows:

Effective Timing

1. This Law takes effect from July 1, 2025, except as stipulated in Clause 2 of this Article.

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Thus, according to the above provision, student insurance is not subject to value-added tax from July 1, 2025.

Are student insurance subject to value-added tax in Vietnam from July 1, 2025? (Image from the Internet)

Where and how is the value-added tax paid in Vietnam?

According to Article 56 of the Law on Tax Administration 2019, the specific regulations on tax payment locations and methods are as follows:

[1] Taxpayers shall pay tax into the state budget as prescribed below:

- At the State Treasury;

- At the tax administration agency where the tax declaration dossier is received;

- Through an organization authorized by the tax administration agency to collect taxes;

- Through commercial banks, other credit institutions, and service organizations in accordance with the law.

[2] The State Treasury, commercial banks, other credit institutions, and service organizations in accordance with the law are responsible for arranging locations, equipment, and officials to facilitate prompt tax payment by taxpayers into the state budget.

[3] The agency or organization receiving tax payments or withholding tax must issue a tax receipt to the taxpayer.

[4] Within 8 working hours from receiving the tax payment from the taxpayer, the agency or organization receiving the tax must transfer the money into the state budget. In cases where tax is collected in cash in remote, island, and difficult-access areas, the time to transfer tax into the state budget is subject to regulations by the Minister of Finance.

Which entities shall pay the value-added tax in Vietnam from July 1, 2025?

According to Article 4 of the Law on Value-Added Tax 2024 (effective from July 1, 2025), specific provisions on value-added tax payers are as follows:

- Organizations, households, and individuals producing and trading goods and services subject to value-added tax (hereinafter referred to as business establishments).

- Organizations and individuals importing goods subject to value-added tax (hereinafter referred to as importers).

- Organizations and individuals producing and doing business in Vietnam purchasing services (including cases where services are attached to goods) from foreign organizations without permanent establishments in Vietnam, individuals residing overseas not residing in Vietnam, except as stipulated in Clause 4 and Clause 5, Article 4 of the Law on Value-Added Tax 2024; organizations producing and doing business in Vietnam purchasing goods and services to perform exploration, development, and exploitation of oil and gas fields from foreign organizations not having a permanent establishment in Vietnam, individuals residing overseas not residing in Vietnam.

- Foreign suppliers without permanent establishments in Vietnam engaging in e-commerce businesses, digital platform-based businesses with organizations or individuals in Vietnam (hereinafter referred to as foreign suppliers); foreign digital platform managers processing the tax payment obligations on behalf of the foreign suppliers; organizations in Vietnam implementing value-added tax calculation methods deducting tax to purchase services from foreign suppliers without permanent establishments in Vietnam through e-commerce or digital platforms to process the tax payment obligations on behalf of the foreign suppliers.

- Organizations managing e-commerce trading floors, digital platforms with payment functions executing tax withholding, processing, and accounting for the tax deducted for household businesses, and individual businesses on e-commerce platforms and digital platforms.

When is the value-added tax determined according to the new law in Vietnam?

According to Article 8 of the Law on Value-Added Tax 2024, specific provisions on the timing to determine value-added tax are as follows:

[1] The timing to determine value-added tax is prescribed as follows:

- For goods, it is at the point of transferring ownership or the right to use the goods to the buyer or at the time of invoicing, regardless of whether the payment has been received or not;

- For services, it is at the point of completion of the service provision or the time of invoicing for the service provision, regardless of whether the payment has been received or not.

[2] The timing to determine value-added tax for the following goods and services is stipulated by the Government of Vietnam:

- Exported goods, imported goods;

- Telecommunication services;

- Insurance business services;

- Electricity supply, electricity production activities, and clean water activities;

- Real estate business activities;

- Construction, installation, and oil and gas activities.